2005 Farm Subsidies Most Since '01

Watchdog group calls for farm subsidy changes after government gives out $21.1 billion in 2005.

Farm subsidies in the U.S. reached $21.1 billion in 2005, up 68% from the year before, according to the Environmental Working Group. The D.C.-based group is releasing a report aimed at pointing out problems with the current farm subsidy payment system.

Much of the spike in payments in 2005 was due to damage from hurricanes Katrina and Rita. $9.4 billion went to corn growers and $3.3 to cotton growers after the hurricanes disrupted transportation networks and forces farmers who would have exported their crops to sell locally at lower prices.

Some of the growers receiving the most subsidy money were citrus growers in Florida. This June's orange crop is expected to be the smallest in 15 years, due partly to hurricane damage.

Wheat and soybeans received less aid, as their crops were less affected by the hurricanes. With higher prices in 2006, total U.S. subsidies are expected to decline this year.

Ken Cook, president of the Environmental Working Group, hopes legislators working on the new farm bill will take into account the near-record amount of subsidies given in 2005. Cook's group says the subsidies harm agriculture by giving payments to large agribusinesses instead of small farmers and distorting trade.

"You can see how much some crops are dependent on price - distorting payments," Cook says.

TAGS: Soybean
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